Jaguar Land Rover posted a pre-tax loss of £3.4 billion in the final three months of 2018, caused by a massive one-off adjustment in the value of its investments.
The loss includes a one-off £3.1 billion ‘exceptional charge’, resulting from the firm deciding to adjust the ‘carrying value’ of its capitalised investments.
Half of the charge was due to the firm acknowledging that investments in machinery and plants were worth less than previously thought. The other half is understood to be effectively lowering th evalue of past investment in product development, in recognition it will not reclaim that with future sales.
It is likely a recognition that previous investment in technology to build diesel-engined cars – which has long made up the bulk of Jaguar Land Rover's sales – won't be recouped due to the slump in demand for the powertrain.
Excluding that one-off charge, Jaguar Land Rover posted a £273 million pre-tax loss between October and December, against revenues of £6.2 billion. The firm sold 144,602 vehicles between October and December 2018, down from 154,447 in the same period of the previous year. The £273 million pre-tax loss compares with a £90 million loss in the previous quarter of 2018, running from July until September.
Jaguar Land Rover said that drop in profit was down to a slump in sales in the struggling Chinese market, which offset a slight rise in sales in Europe and the US.
Jaguar Land Rover boss Ralf Speth said the one-off £3.1 billion charge was part of the firm’s Charge and Accelerate transformation schemes, designed to invigorate the struggling company with around £2.5 billion of investment. The firm said it has made £500 million of cash improvements through measures introduced as part of those schemes.
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Kamelo
Trouble
Indeed, Land Rover is in very, very serious trouble.
scrap
That is a massive loss. Not
That is a massive loss. Not enough detail here to really explain it. Are they writing down the value of stock or other Chinese assets? At least the I Pace appears to be a success.
scotty5
The futures market
Put in simplistic terms, JLR management made a bad bet. It's a HUGE loss and nothing whatsoever to do with Brexit, but that won't stop the usual voices from blaming it.
To paraphrase Jo Moore, "It's a good time to bury bad news".
LJames
Oh dear
What worries me is that they are continually investing in new technologies and facilities, wich is admirable and needed, but it is hard to see where they get the money from. Just hope they can pull it back.
Jameson
jonboy4969
Grow up - It is far from
Grow up - It is far from being in serious trouble - they have made enough profits over the last 10 years and have significant funds in the bank, so no, there is no worries, ALL motoring companies have hic cups, some far worse than this yet they are still here.
xxxx
If it's not one it's the other
Have taken over from Tesla on the BIG losses front. Still like some of their cars/engines though
typos1 - Just can’t respect opinion
max1e6
JLR mismanagement
A £3.4 billion loss. Are they going to blame BREXIT for this too?
hackjo
max1e6 wrote:
Apparently Speth blames Saturn not being in line with Mercury, the winter solstice being delayed by two days last year and...
...Brexit
BANG!!!
rare
I sincerely hope they can
I sincerely hope they can turn it around. The XE needed to be more competitive.
eseaton
I'm quite convinced Speth is
He is not even subtle about it.
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